News Release
25 January 2010
Jamaica Balance of Payments1
September 2009

Provisional data for September 2009 show that there was an improvement in the current account deficit of Jamaica’s
Balance of Payments. This improvement was primarily due to a contraction in the merchandise trade deficit. Net
proceeds from private transactions were insufficient to offset net official investment outflows and the deficit on the
capital and current accounts. In this context, the net international reserves (NIR) declined, albeit marginally, for the
month.

Influenced by lower payments for fuel imports, there was a decline in the merchandise trade deficit for the period
January to September 2009. This was largely responsible for a contraction in the current account deficit over the
period. Net official and private inflows were more than sufficient to offset the current account deficit.
consequence, there was an increase in the NIR of the Bank of Jamaica for the period.
September 2009
Provisional data indicate that the current account deficit narrowed by US$90.4
million in September 2009, relative to the deficit in September 2008 (see Table).
This improvement stemmed primarily from a contraction of US$115.3 million (42.5 per
cent) in spending on fuel imports largely reflecting a 33.2 per cent decrease in the
average price of crude oil on the international market in September 2009, relative to
September 2008. With the exception of miscellaneous commodities, which increased by
14.6 per cent, all the other categories of imports also recorded double digit declines.
The impact of the fall in imports on the merchandise trade deficit was partly offset by
declines of US$97.8 million (82.3 per cent), and US$21.7 million (56.1 per cent) in
earnings from alumina and mineral fuel exports, respectively.
1
For more details see Balance of Payments Monthly Statistical Update at
http://www.boj.org.jm/publications_home.php
1
As a
There were also improvements in the services and current transfers sub-accounts. With
regard to the services sub-account, the improvement was principally due to the
continued decline in net transportation payments, associated with the lower level of
imports. Growth in current transfers reflected higher official grant inflows of US$19.0
million and US$10.02 million from the European Union which were received for debt
reduction and national security sector reform, respectively. This offset a 17.3 per cent
decline in gross private remittances.
An increase in the deficit on the income sub-account was the sole offsetting influence to
the improvement of the above noted sub-accounts. The expansion in the deficit on the
income sub-account was mainly attributed to declines in compensation to employees
and lower investment income inflows.
With regard to financing, net inflows from private investment transactions were
insufficient to offset net official investment outflows and the deficits on the current and
capital accounts. As a result, the NIR of the Bank of Jamaica declined marginally by
US$1.0 million for the month.
January – September 2009
There was a US$1 735.2 million reduction in the current account deficit for the
period January to September 2009, relative to the comparable period in 2008. An
improvement in the merchandise trade deficit was the main source of the reduction,
stemming primarily from a decline of US$1 909.8 million (64.5 per cent) in the value of
mineral fuel imports. There were also declines in the value of all the other categories of
imports, with the exception of miscellaneous commodities. The impact of the contraction
in imports on the merchandise trade deficit was partly offset by lower earnings from
major traditional exports, particularly alumina, as well as non-traditional exports, mainly
ethanol.
For the review period, there was also an improvement in the services sub-account. The
increase in the surplus on the services sub-account resulted from a fall in freight and
insurance charges, related to the reduction in the value of imports. Net earnings from
travel also increased marginally reflecting a 19.8 per cent decline in spending of
Jamaicans travelling abroad.
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The impact of the improvement in the merchandise trade and services sub-accounts on
the current account deficit was, however, partly offset by an increase in the deficit on the
income sub-account, as well as lower net current transfers. The deterioration in the
income account was related to contractions in inflows associated with compensation to
employees and investment income. The decline in current transfers reflected a
contraction of 14.9 per cent in gross remittance inflows.
In relation to financing, net official and private investment inflows were more than
sufficient to finance the current account deficit. As a result, there was an increase of
US$160.3 million in the NIR during the review period.
BALANCE OF PAYMENTS SUMMARY
US$MN
1/
September
1/
September
Jan-Sep
Jan-Sep
2008
2009
Change
2008
2009
Change
1. CURRENT ACCOUNT
-240.4
-149.9
90.4
-2309.1
-573.9
1735.2
A. GOODS BALANCE
-376.6
-306.0
70.6
-3863.7
-2271.6
1592.1
Exports (f.o.b.)
246.6
107.7
-138.9
2276.7
1044.4
-1232.3
Imports (f.o.b.)
623.1
413.7
-209.5
6140.5
3316.0
-2824.4
B. SERVICES BALANCE
-25.3
-3.1
22.2
325.8
613.1
287.3
Transportation
-62.5
-40.7
21.7
-506.3
-264.9
241.4
Travel
78.9
76.2
-2.7
1321.6
1329.6
8.0
Other Services
-41.7
-38.6
3.2
-489.5
-451.6
37.9
-34.3
-39.4
-5.1
-404.7
-435.2
-30.5
-18.8
C. INCOME
Compensation of employees
12.1
10.0
-2.2
47.7
28.9
Investment Income
-46.4
-49.3
-2.9
-452.4
-464.1
-11.7
D. CURRENT TRANSFERS
195.8
198.5
2.7
1633.5
1519.8
-113.7
Official
7.8
37.1
29.3
76.3
124.5
48.2
Private
188.0
161.4
-26.5
1557.3
1395.4
-161.9
240.4
149.9
-90.4
2309.1
573.9
-1735.2
A. CAPITAL ACCOUNT
4.6
-2.4
-7.0
26.0
18.4
-7.6
a. Capital Transfers
4.6
-2.4
-7.0
26.0
18.4
-7.6
2. CAPITAL & FINANCIAL ACCOUNT
Official
7.0
0.6
-6.4
48.6
45.2
-3.3
Private
-2.4
-3.0
-0.5
-22.6
-26.9
-4.3
0.0
0.0
0.0
0.0
0.0
0.0
-1727.6
b. Acq./disposal of non-prod. non-fin'l assets
B. FINANCIAL ACCOUNT
235.9
152.4
-83.5
2283.1
555.5
Other official investment
27.4
-0.7
-28.1
558.0
168.3
-389.7
Other private investment 2/
171.7
152.0
-19.6
2098.5
547.5
-1551.0
Reserves
36.8
1.0
-373.4
-160.3
1/ Provisional
2/ Includes errors & omissions
BANK OF JAMAICA
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